An article in the economist magazine argues that the real problem with health in

Question

An article in the economist magazine argues that the real problem with health insurance is%u201D

%u201CThe healthy people who decide not to buy insurance out of rational self-interest, and who turn out to be right. By not buying insurance, those (largely young) healthy people will be failing to subsidize the people insurance is meant for: the ones who end up getting sick.

a-      Why is it rational for healthy people not to buy health insurance?

b-      Do you agree that health insurance is meant for people who end up getting sick?

c-       Why is the situation described here a problem for a system of health insurance? If it is a problem, suggest possible solutions.

Please answer and I will be rating

Explanation / Answer

a) because the probability of getting sick of healty people is very low .So the amount money they pay for health insurance is much larger than the normal money which they pay for their normal checkup.

b) yes i is meant mostly for those people who are general remain sick most of the time.

c) yes it is problem for insurance company because the people who got sick buys insurance so company has to pay money to sick people who has insurance.So they are not getting a huge profit from this and people who don't get sick generally don't buy insurance.So insurance company is not able to gain money from them also.So inall the situation is not good for insurance company

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